Manulife Financial Corporation Reports Second Quarter Results
TORONTO – Manulife Financial Corporation (“MFC”) today reported a net loss attributed to shareholders of
$2.4 billion for the second quarter ended June 30, 2010, equating to a fully diluted loss per share of $1.36. For
the second quarter of 2009, MFC reported net income of $1.8 billion or $1.09 per share.
During the quarter, net results were impacted as equity markets retreated globally and interest rates declined
materially, particularly in the U.S. Non-cash charges related to equity market declines in the quarter amounted to
$1.7 billion. Non-cash charges related to lower interest rates amounted to $1.5 billion in the quarter.
Chief Executive Officer Donald A. Guloien stated, “Our results for the second quarter were disappointing. Lower
equity markets and historically low interest rates resulted, on a Canadian GAAP basis, in large non-cash charges
in the form of mark-to-market increases to our reserves for policyholder liabilities. We would expect to see
most of these charges reverse into earnings in the future if interest rates rise and if equity markets grow faster than
the long-term growth rates used in the valuation of policy liabilities. In fact, the turnaround in equity markets in
July alone, if sustained, should reverse a substantial portion of these losses. As a point of comparison, under
U.S. GAAP we expect to report a small profit for the second quarter and our Shareholders’ Equity under U.S.
GAAP is expected to be $7 billion higher than under the Canadian GAAP equivalent.”
For Immediate Release
August 5, 2010
· Net loss of $2.4 billion driven by mark-to-market impact of lower equity markets and lower interest rates in
the quarter – reserves for non-cash losses expected to mostly reverse in the future, if interest rates increase
and markets recover faster than the long-term growth rates used in the valuation of policy liabilities
· Underlying business performed well: